THISDAYonline

In his usual manner, the core investor, Mr. A. K. Mirchandani, has indicated willingness to bring Shongai Packaging Industry Limited to the Nigerian capital market.

The Chairman of the company, Alhaji Ola Kashim, disclosed this while answering reporters' questions at Ota recently.

He disclosed that Mirchandani who became the new owner of the company a few years back, has a vision to make Shongai the number one plastic packaging company in Nigeria.

Since he took over the company, the new core investor has injected so much money that has brought the desired turn-around effect within a very short time. Mirchandani is projecting to make the company, the number one in the country by the end of year 2004.

Already, the core-investor has major stakes in two quoted firms: Champion Breweries Plc and West African Glass Industry Plc (WAGI) on the Nigerian Stock Exchange (NSE).

Although, the company used to shy away from publicity, for the reason that its customers were quite few, its major hindrance then was inability to meet up with the demands from customers due to lack of the necessary machineries. That has become history with the new core investors who has successfully imported and installed many machines which are capable of satisfying the demands of all the customers in the West African sub-region.

The company is currently in the process of diversifying into the production of plastic made spare parts as obtainable from the advanced countries of the world as it now has sufficient machineries to cater for the various levels of customers.

Also, the factory is still under expansion so as to provide sufficient storage facility for the company's raw materials and finished products. Construction work is going within the company's Ota factory to make for easy evacuation of finished products.

The company has increased its share capital to N500, and has also projected to raise the same share capital to one billion Naira before the end of 2004.

This shows the strong commitment by the core investor towards realising his dreams of making the company the number one plastic packaging firm. Apart from providing the necessary facilities for effective and efficient production, the core-investor has done much in the area of staff motivation to encourage them for greater productivity.

The core investor has indicated his plans to take the company to the Nigerian capital market in terms of going public by year 2004. Shongai's market share in the plastic looks good as it controls as much as 70 per cent of the crate production, while the containers for paints with tamper proof to avoid fakers.

In the area of competitors, Songhai is not threatened at all by competitors. The relationship of the company with the local communities in which it operates is very cordial.

The company maintains a policy that encourages qualified indigenes

to apply for employment.

Shongai at the initial stage encouraged its staff by giving them loan advances to come and live in Ota so as to further strengthen the finances of the landlords in these communities. It also contributes in other ways to the development of the communities.

Responding to a question, the Chairman said the siting of the factory at Ota was not politically motivated rather it was done after carrying out a thorough feasibility study of the area.

The company adopted a policy that encourages qualified indigenes for employment as long as they are willing. In a bid to encourage for development of the area, apart from building residential quarters, staff are given housing loans to rent houses at Ota.

The villages equally have been responsive because they have continued to identify with the company in areas of progressive development.

Indigenes are further encouraged so as to become distributors of the company's products, a gesture that has enhanced the growth of their financial profile.

The company's paid up capital that was N41.7million until December 31,I999, has been raised to N500 million by the year 2003, while the shareholders are committed to raise it to N1 billion by the year 2004.

He said that the new core-investor had acquired 16,678.46m2 area of land out of which only 4287.25m2 land was used for building construction. During the year 2000 to 2003, additional 23,925m2 area of land was added and additional 9723.25-m2 areas were used for building construction. Thus the total land used for building construction was increased by 300 per cent whereas the volume of building construction on used land was increased by 400 per cent. Further additional land and buildings are still under development and construction for future expansions and projects.

The Chairman said that the gains of the restructuring exercise achieved by the new investor are enormous. With additional funding provided by the new investors during the period from 2000 to 2003, 18 injection moulding machines, two extrusion blow moulding machines, two injection blow moulding machines and two multicoloured UV offset printing machines as well as two multicoloured Silk Screen Printing machines including 70 moulds have been brought in to increase and widen the production capacity and broaden the product base.

With this addition of most modern, computer controlled, high-tech moulding and printing machines, the Chairman said that the company's production capacity significantly grew by 500 per cent.

"For instance, crate production capacity has been increased from 5000 to 25,000 crates daily, while cosmetic jar capacity has been increased from 600,000 to almost 3 million jars of various sizes per months.

He disclosed further that Shongai's supply share in crate business that was just I6 per cent of Nigerian Breweries Plc's requirement until year 2000, has grown to 60 per cent by the year 2003.

"This continued growth also confirms that Shongai always ensures customer's satisfaction by providing consistently high quality, European standard products and is now a reliable quantity supplier," said the Chairman.

He said that during the year 2003, SHONGAI introduced new range of high quality cosmetic jars with tamper evident caps to ensure safety against product adulterations and enhance product image with multi- colour UV offset printing on these jars.

"The total estimated market for emulsion paint is about 1.5 billion gallons per annum and Shongai is poised to increase market share with introduction of correct Tamper Proof four litres and 20 litres Paint Container in to Nigerian market by year 2004," he said.

The company plans to export its most popular and high end products such as beer crates, industrial crates, paint pails and cosmetic jars,to neighbouring ECOWAS countries and subsequently to European countries.

SHONGAI is determined to achieve ISO 9001/2000 certification in year 2004. It is also preparing for certification from SON and NSI.

The Chairman appealed to the Federal Government to withdraw the recent price hike in petroleum products because it is a disincentive to growth and environmentally friendly industrial production.

The major problems facing manufacturing companies such as Songhai include the lack of access roads, water and power (buying of generators). He requested that government should help by providing steady electricity so that the generators will have serve as standby rather the present situation where the electricity serves as standby for the generators.

Talking about the future of Songhai in Nigeria, the Chairman re-assured Nigerians that more people would benefit from the company by way of employment, increase returns on the investments of the shareholders.

The focus is to number one in Nigeria, in area of expansion to part of the country. The company has also embarked on aggressive training of the locally engaged staff in preparation for them to take over from the expatriates when they eventually go back to their different countries.

He said that the company's focus is to have more technically skilled Nigerians working in Songhai.

The Chairman disclosed that raw materials are hundred per cent imported from abroad. He simple message is the assurance the company has been fully repositioned to serve Nigerians better as it will not disappoint them. He added that efforts were been geared towards improving on the quality of the products. "We have enough capacity to cope with the market demands for our products," said the Chairman.

Kashim, the Chairman was the first Vice Chairman of the Manufacturers Association of Nigeria (MAN), Ogun State branch for only one year. He latter served as the treasurer in the second year of the existence of the association. He served the association for about ten years in the same position.

He started with Inlaks Group in 1970 when he returned from England as a training manager. At that time Inlaks was just buying and selling.

Training of workforce at all levels has continued to be a major priority, as various levels employees are sent for different training courses depending upon individual staff's training requirement. The employees who are pursuing various educational courses and programs are encouraged and supported. The operatives are employed with minimum school certificate or trade test qualification as they are provided with on the job training for various high tech machines.

Shongai Packaging Industry Limited was established in 1981 as the subsidiary of Sona Breweries and started manufacturing of plastic crates, paper labels and metal crowns under one roof supplying all the packaging needs of SONA Breweries as well as other major breweries like Nigerian Breweries Plc, Guinness Nigeria Plc, Jos International Breweries and so on.

Until 1984, all the brewery-packaging products were in demand but subsequently demand for plastic crates started diminishing. This slowing down of crate business opened new avenues for Shongai to diversify and in 1985 Shongai became the first company to introduce four litres Plastic Paint Container to the Nigerian Paint Industry.

With an innovative idea and future vision, during 1989, Shongai introduced the Tamper Evident 20 litres plastic paint container into the Nigerian market. This was a very big success for Shongai and brought all major paint manufacturers such as Portland, Berger, CAPL, DN Meyer, IPWA, and President etc. under Shongai's clientele list.

During the 90's, Shongai expanded its operation by entering into production of plastic shells for automotive batteries and Plastic Tubes for textiles on job work. In 1996 the company diversified into the manufacturing of Cosmetic Jars by installing the very high tech and high quality mould and machinery of Jomar, USA.

From inception until end of 1999, Shongai Packaging was 40 per cent owned by Vulcan Packaging Corporation, a foreign shareholder and 60 per cent by Nigerians. The unwillingness of Nigerian shareholders made it extremely difficult and impossible to fund the new machinery acquisition and renewal of ageing old plant, which was very essential and necessary for survival and growth of the company.

Against this background, the Nigerian shareholders sold their interests in Shongai Packaging to Vulcan Packaging Corporation, thus making Shongai Packaging Industry Limited wholly owned by an offshore company.

Also by the end of 1999, Inlaks Group of Companies, the offshore owner of Vulcan Packaging Corporation, sized the opportunity of the restructuring to divest their interest in Vulcan Packaging Corporation in favour of a new foreign investor. Therefore with effect from December 30, 1999 Shongai Packaging Industry Limiited ceased to be part of Inlaks Group of Companies in Nigeria.